In 2021, employers have a new option of providing their employees with financial contributions (allowance) for meals that are exempt from tax for employees pursuant to new provisions of Section 6(9)(b) of the Income Tax Act.
Financial contributions for meals per shift are exempt from tax up to 70% of the upper limit of meal allowance payable to salaried employees – i.e. to employees specified in Section 109(3) of the Labour Code – for business trips of 5 to 12 hours. This upper limit of meal allowance set forth by Decree No. 589/2020 Coll., on the Change to the rate of basic compensation for the use of land motor vehicles and meal allowance and establishing average fuel prices for the purpose of providing travel allowances, amounts to CZK 108 for salaried employees (i.e. non-business community) in 2021.
Therefore, the tax-optimal amount of the financial contribution (allowance) for meals amounts to CZK 75, both for employers and employees, in 2021.